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There you are - DOS line terminators (<CR> = \r = ^M = 0x0D). Those cause the combined lines to wrap back to the left margin for every column. The idiosyncratic output seen in post #3 comes from the...

What happens if you try:
for i in *.tsv
do tr -d '\r' < "$i" > "$i.nocr"
done
paste *.nocr | head

I agree with RudiC that we need to see the first few lines of your input files. From the output you have shown us, it would seem that the most crucial would be:
for file in *.tsv
do echo "File:...